I used to work in this space and Lightstream was always doing interesting things, even if they never seemed to find PMF.
1: https://support.golightstream.com/hc/en-us/articles/38643168...
You can have customers without product market fit.
A product that hasnt found PMF could be a solution looking for a problem, or it might solve a true problem but that problem isn't important, durable, or (crucially) common enough to sustain a business.
So OP was saying that Lightstream Studios made some great stuff, but that ultimately the problem they were solving wasnt durable or widespread enough for the market to sustain the business they had built.
Background on Lighstream Studios is they did a streamer setup in the cloud, so you didnt have to run OBS locally. A lot of people seemed to want that at the time, especially console gamers, but the market changed around them. Consoles are way better at streaming without any other stuff now, and PC gamers largely settled on running OBS (for free) on their own existing hardware. They had like 17k paying customers at one point, so customers wasnt the smoking gun here.
So the customers went away (not durable), and didn’t have enough customers (not widespread)?
A good example is the voice assistant hardware from Amazon and Google. The speakers are everywhere, basic daily use stats are likely solid, and retail display square footage remains huge. Yet almost no one will pay for the associated subscriptions or other premium services. The hardware was sold at a loss(?) expecting downstream revenue from services that customers simply don't value enough to buy.
Sounds like you don’t have a customer, in the sense that I will also accept a free chocolate bar someone hands me on the street but won’t pay for it.
I take your point that PMF is useful to describe a thing. I just see it as a funny term to describe something obvious. But language evolves in different social groups and this is the language of SV. In large part I find it odd because I’m not part of that group and have other ways of describing the same thing. Accepting that neither is right or wrong.
There are plenty of companies (successful ones) that I’d argue don’t have PMF, but have plenty of customers (ex Palantir)